The retail industry expected that the coronavirus outbreak would cause supply chain disruptions, but the latest report from the National Retail Federation (NRF) indicates that these effects will be larger, and last longer, than had originally been forecast. Even as some Chinese factories restart their operations, logistics, transportation and personnel challenges could continue to slow down imports for at least the next six to eight weeks.
The Global Port Tracker report, prepared by Hackett Associates, estimated that U.S. ports handled 1.42 million Twenty-Foot Equivalent Units (TEU) in February, a 12.6% drop from the same month in 2019 and significantly lower than the 1.54 million TEU forecast before the coronavirus began to affect imports. March is forecast at 1.32 million TEU, down 18.3% from 2019 and less than the 1.7 million forecast prior to the virus’ spread. A TEU is one 20-foot-long cargo container or its equivalent.
“Now that we are in the coronavirus environment, uncertainty has expanded exponentially,” said Ben Hackett, Founder of Hackett Associates, in a statement. “Our projections are based on the optimistic view that by the end of March or early April some sort of normalcy will have returned to trade.”
A separate NRF member survey revealed that 40% of respondents said they are seeing disruptions to their supply chain due to the virus, and another 26% expect to see disruptions as the outbreak continues to affect the world economy.
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“There are still a lot of unknowns to fully determine the impact of the coronavirus on the supply chain,” said Jonathan Gold, VP for Supply Chain and Customs Policy at NRF in a statement. “As factories in China continue to come back online, products are now flowing again. But there are still issues affecting cargo movement, including the availability of truck drivers to move cargo to Chinese ports. Retailers are working with both their suppliers and transportation providers to find paths forward to minimize disruption.”
